Tap Building Products Zambia Limited v Elinati Zulu (Administratrix of the Estate of the late Darius Mhlanga) (APPEAL NO. 174 OF 2008) [2013] ZMSC 79 (30 December 2013)

\.-, IN THE SUPF~ME COURT OF ZAMBIA APPEAL NO. 174 OF 2008 HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN: • TAP BUILDING PRODUCTS ZAMBIA LIMITED APPELLANT AND ELINATI ZULU (Administratrix of the Estate of the Late Darius Mhlanga) RESPONDENT CORAM: MAMBILIMA, DCJ; CHIRWA AND MWANAMWAMBWA, JJS On 22 nd June 2010 and 30 th December 2013 For the Appellant: For the Respondent: Mr. N. NCHITO, of Messrs MNB Mr. M. CHITUNDU, of Chifumu Banda and Associates MAMBILIMA, DCJ, delivered the Judgment of the Court. JUDGMENT CASES REFERRED TO: 1. GERALD MUSONDA LUMPA VS MAAMBA COLLIARIES (1988/89) Z. R. 217 2. LUKAMA & OTHERS VS LINT COMPANY OF ZAMBIA, (1998) 3. DEVELOPMENT BANK OF ZAMBIA V MALAMBO ( 1995-97) 89 4. KITWE CITY COUNCIL VS WILLEN NGIN! (2005) ZR 57 and M G WALKER 3RD EDITION 1972 5. ZCCM VS JAMES MATALE SCZ JUDGMENT NO. 9 OF 1996 LEGISLATION REFERRED TO: 1. THE INDUSTRIAL AND LABOUR RELATIONS ACT, CAP 269 OF THE LAWS OF ZAMBIA 2. THE ENGLISH LEGAL SYSTEM BY R. J. WALKER, 3RD EDl'I'. ION, 1972 When we heard this appeal, we sat with our brother CHIRW A JS, who has since retired. This, therefore, is the majority decision of the Court. This 1s an appeal against the decision of the Industrial Relations Court, (IRC) of the 11 th July 2008, in a matter between E\,INATI ZULU (ADMINISTRATRIX OF THE ESTATE OF THE LATE DARIUS MHLANGA) (hereinafter referred to as the 'Respondent'), and TAP BUILDING PRODUCTS OF (Z) LIMITED (hereinafter referred to as the 'Appellant') . The Respondent, as administratrix of the estate of the late Darius MHLANGA, sought a declaration that the termination of employment of the said Darius MHLANGA, by the Respondent, was in bad faith and unfair because he was not given an opportunity to be heard. She sought damages for unlawful termination of employment, and, for malicious prosecution and false imprisonment. The Court below found that the termination of the employment of Darius MHLANGA, was properly done in conformity with the terms and conditions of his employment. The Court however ordered that Appellant must ' ... pay the estate of the late Darius MHLANGA salary arrears and all other employment benefits that he was entitled to from 5 th November 1999, the date his employment was terminated, to the date when his employment was effectively terminated.' The Court also ordered that the . sums due should attract interest at the Bank short term deposit rate, from the date of the 'effective termination' to the date of the judgment, and thereafter, at the current lending rate to the date of • payment. The facts of this case can be briefly stated. The late Darius MHLANGA, was employed by the Appellant Company on 1st April 1986, and his employment was terminated on 5 th November 1999. In terminating his services, the Appellant Company invoked Clause 6(c) of the applicable Conditions of Service. The said Clause states that:- "The employment under these conditions of service may be terminated: (a) By the Company giving the employee notice in writing and paying him three months' salary and leave pay in lieu, in which event the employment will terminate on the date stipulated in such notice." A perusal of the documents filed in the Court below reveals that whilst the deceased was still in active employment, there was an audit at the Chipata branch where the deceased was a supervisor. The audit was carried out between 16th and 22 nd August 1999. The report of the said audit dated 22 nd September 1999, revealed some anomalies. On 22 nd November 1999, the 3 deceased's services were terminated effective 5 th November 1999. No reason was given for the termination. A second audit was carried out between 29th November and 1st De9ember 1999, after the deceased had left employment. A report • of this audit, dated 2 nd December 1999, revealed that K7. 962 million was unaccounted for. On the basis of this audit report, the deceased was prosecuted in the Subordinate Court for the offence of theft by servant, but was later acquitted. The deceased sued the Appellant 1n the High Court claiming damages for false imprisonment and malicious prosecution. He later discontinued the case and took the matter to the Industrial Relations Court claiming that the termination of his employment was made in bad faith because he was not given an opportunity to be heard. The Respondent, who is the mother of the deceased, told the lower Court that after his dismissal, he (the deceased) tried to find employment. He applied for a job at Kafubu Water and Sewerage Company Limited. He did not get the job because when the Appellant Company was contacted for a reference, they wrote to say that he had been dismissed on the ground of misappropriation of funds. The deceased then realized that even if the Company had not given a reason for term1nating his services, the damaging letter. to his prospective employers implied that he was dismissed for misconduct for which he was not afforded an opportunity to be heard . • While the matter was pending in Court, several letters were exchanged between the advocates. The Appellant later apologized for the damaging letter that they had written about the Respondent to Kafubu Water and Sewerage Company Limited and asked him to discontinue the matter in Court so that they could settle ex curia. The ex-curia settlement did not come through and in the process , Darius MHLANGA passed away on the 1st of January 2005. His mother, the Respondent herein, was appointed administrator of his estate and decided to continue with the case against the Appellant. At the trial, the Respondent gave evidence on behalf of the deceased, while Mr. Chileshe CHAFWA, the Appellant's Human Resources Officer, testified on behalf of the Company. · ·· After considering the evidence from the two witnesses and the submissions of the parties, the Court stated inter alia, that:- " .... we accept the arguments of both Counsel that the teimination of employment of the late Darius MHLANGA was properly done in conformity with the terms and conditions of employment ... We say so because it is the giving of notice or payment in lieu thereof that terminates the emp!oyment - see the case of GERALD MUSONDA LUMPA 1 ." The Court rejected the claim for damages for malicious prosecution on the ground that it had no jurisdiction to entertain such claims under Section 85 of the INDUSTRIAL AND LABOUR • RELATIONS ACT 1 (herein after referred to as the 'Act'). At the end of the day, the Court found that Respondent had failed to prove her case on a balance of probabilities. After so finding, the Court stated: "Notwithstanding what we have said above, we find on the evidence on record that the late Darius MHLANGA was not paid the three months' pay and accrued leave on the date indicated in the purported letter of termination. On the basis of the principle in the case of GERALD MUSONDA MUMBA V MAAMBA COLLIERIES LIMITED 1 , we find that the effective date of termination of the late Darius MHLANGA was the date when the payment of the three months' salary and leave pay in lieu was made. This means that the employment of the late Darius MHLANGA was not terminated until the day when the foregoing payments were effected. This being so, we find that the Respondent must pay the estate of the late Darius MHLANGA salary arrears and all other employment benefits that he was entitled to from 5 th of November 1999 to the date when he was effectively terminated. The sums due will attract interest at the bank short term deposit rate from the date of the effective termination to the date of this judgment and thereafter at the current bank lending rate to date of payment. We order accordingly in terms of Section SSA of Cap 269 of the laws of Zambia." The Appellant has now appealed to this Court against the judgment of the Court below, citing the following grounds of appeal:- 1. That the Court below erred in law and in fact when it made an order i.n favour of the Respondent in terms of Section 85 A(d) of the Industrial and Labour Relations Act despite finding that the Respondent had not proved her case on the balance of probabilities. - 2. That the Court below erred in law and in fact when it found that the Respondent's termination by letter dated 5 th November 1999 was not effective and that termination was only effective on the date of the payment of the three months' salary in lieu of notice. 3. The Court below erred in law and in fact when it awarded the Respondent salary arrears and all other employment benefits from 5 th November 1999 to the date when the payment of three months' salary in lieu of notice was made. The Appellants argued the first ground of appeal separately, and the second and third grounds of appeal together. On the first ground of appeal, the learned Counsel for the Appellant submitted that since the Court found that the complainant had not proved her case on a balance of probabilities, it should not have made an order in terms of Section 85 (A) (d) of the Act. The said provision states as follows: "85 A. Where the Court finds that the complaint or application presented to it is justified and reasonable, the Court shall grant such remedy as it considers just and equitable and may: (d) make any other order or award as the Court may consider fit in the circumstances of the case." Counsel argued that this Section only allows the Court to grant a remedy where the complaint presented is proved and found to be justified and reasonable. Relying on the learned authors of the book 'THE ENGLISH LEGAL SYSTEM2 ', Counsel submitted that as a general' rule, the standard of proof in civil cases is proof on a balance of probabilities 'whether the burden of proof to be discharged is the general burden or a particular burden.' He submitted that failure to prove one's case entails that one is not entitled to any remedy whatsoever. That the Court could not, • therefore , on one hand state that the Respondent had failed to prove her case on a balance of probabilities, and on the other, make - an order in favour of the Respondent in terms of Section 85(A)(d) of the Act. On the second and third grounds of appeal, Counsel argued that the Court erred in law and in fact when it held that the effective date of termination was the day on which payment of the three months' salary in lieu of notice was made. He cited the case of GERALD MUSONDA LUMPA VS MAAMBA COLLIERIES 1 in which it was held that:- "In an ordinary master and servant relationship the master can terminate the contract with his servant at any time and for any reason or for none whatsoever. If a master gives a reason for termination, he is not obliged to substantiate it. It is the giving of notice or pay in lieu that terminates the employment." ___ Counsel argued that based on the GERALD LUMPA 1 case, the letter of termination at page 39 of the record of appeal, effectively terminated the employment between the Appellant and the Respondent. That the date when the actual payment was made was immateria l as the letter . was sufficient in terms of the law to terminate the employment. Counsel contended that a contract of employment is brought to an end on the date that there is an un_dertaking by the employer to make payment in lieu of notice or at • most, on the date on which the period of notice would have expired and not later. That in this particular case, the intention was that the employment contract would come to an end on the date the employer undertook to pay in lieu of notice. To support this argument, Counsel cited the case of LUKAMA AND OTHERS VS LINT COMPANY OF ZAMBIA LIMITED2 . In that case, the Court stated inter alia: "The question we had to consider was whether, on the facts of this case, payment in lieu meant that the employment terminated forthwith or it only terminated the bottom line, when the notice in lieu of payment would have expired... however, is that the facts and circumstances of each case have to be examined in order to glean what was intended." Counsel further relied on the case of DEVELOPMENT BANK OF ZAMBIA VS MAMBO 3 where the Court held that: "The reason for this is, of course, that there was no consideration and no continuing contract between the parties to this action after the three months' salary in lieu of notice." . ~- Counsel submitted that based on this case, the relationship between the Appellant and the Respondent terminated when the Respondent received the termination letter at page 39 of the record of appeal. That it was, therefore , a misdirection for the Court to have found that the Respondent was an employee of the Appellant until the date that he received his benefits. That at most, the Appellant was only entitled to interest on the three months' salary • in lieu of notice. The Respondent filed in her heads of arguments in response to the appeal. The learned Counsel for the Respondent argued that the holding of the Court below, stating that the Respondent had not having proved her case on a balance of probabilities, referred only to the claims of malicious prosecution, false imprisonment and damages for wrongful termination of the contract of employment and not the other claims. That the Court below, having found that the deceased had not been paid his three months' salary in lieu of notice, and, that the termination of the complainant's contract of employment was by way of payment in lieu of notice, relied on the case of GERALD MUSONDA LUMPA VS MAAMBA COLLIERIES LIMITED 1 to hold that the effective date of termination of employment by way of payment in lieu of notice, is the date when the money was paid. According to Counsel, the case of LUMPA VS MAAMBA COLLIERIES LIMITED 1 held that the effective date of e e termination of en1ployment by way of paying in lieu of notice, is the date when the money is paid. He submitted that based on the said holding, it follows, therefore, that a contract of employment that is terminated on payment of money in lieu of notice is terminated on • the date that the money is paid. Counsel argued that the Court below should not be faulted for following the precedents and authorities of this Court when it held that the Appellant should pay the Respondent arrears of salary and all the employment benefits from 5 t h November 1999 up to the date when he was effectively terminated. Lastly, Counsel submitted that there was overwhelming evidence on record to support the findings of the Court and as such, it may be a misdirection to hold that the complainant failed to prove her case on a balance of probabilities regarding the non payment of the deceased's three months' salary in lieu of notice. We have carefully considered the oral and documentary evidence on record, the submissions of Counsel and the judgment appealed against. The jurisdiction of the Industrial Relations Court to adjudicate in employment cases in Zambia is defined by Section 85 (1)(4) and (5) of the Act. The provisions state: "1. The Court shall have original and exclusive jurisdiction to hear and determine any Industrial Relation matters and any proceedings under this Act. (4) (5) The Court shall have the jurisdiction to hear and determine any dispute between any employer and an employee notwithstanding that such dispute is not connected with a collective agreement or other trade union matter. The Court shall not be bound by the rules of evidence in civil or criminal proceedings, but the main object of the Court shall be to do substantial justice between the parties before it." . • Section 85A(d) of the Act further provides that:- "Where the Court finds that the complaint or application presented to it is justified and reasonable, the Court shall grant such remedy as it considers just and equitable and may:- (a) Award the complainant or applicant damages or compensation for loss of employment; (b) Make an order for reinstatement, re-employment or re engagement; (c) Deem the complainant or applicant as retired, retrenched or redundant; or (d)Make any other order or award as the Court may consider fit in the circumstances of the case. ,e Arising from the three grounds of appeal that have been advanced in this case, the central issue that should be resolved in this case is whether, having found that the Respondent had not proved her case on a balance or probabilities, the court was on firm ground to order the Appellant to pay the estate of the late Darius MHLANGA, salary arrears and all other employment benefits that he was entitled to from 5 t h November 1·:199, to the date when the benefits were actually paid. The Court, in this case , labored to ascertain the effective date of ,termination. Clause 6 of the conditions of service under which the deceased served is on termination. It outlines the various ways in which a contract of employment between the Appellant and the deceased could be terminated. The letter of termination states that the termination of the contract in this case was in accordance with Clause 6 c. This Clause provides that employment may be terminated:- "© By the Company giving the Employee notice in writing and paying him three months' salary and in which event the leave pay in employment will terminate on the date stipulated in such notice." lieu, The letter of termination, though dated 2 nd November 1999, did state that the termination of employment would be with effect from 5 t h November 1999. Arising from the conditions of service, the intention of the parties was clearly ascertainable and this is that the·· date of termination of a contract of employment under this Clause will be stipulated in the notice. The letter of termination stated: "This ~·etves to inform you that management has decided to terminate your employment with effect from 5 th November 1999. In lieu of three months' notice, you will be paid three (3) months' salary .... " The Court below referred to the case of GERALD MUSONDA . LUMPA VS MAAMBA COLLIERIES LTD 1 , in which we held that: " ... it is the giving of notice or pay in lieu that terminates the employment." It would appear that the Court, understood our holding in the case of GERALD MUSONDA LUMPA 1 , to mean that it is on the date when the payment in lieu of notice is made that contract of employment is effectively terminated. As we stated in the case of LUKAMA AND OTHERS VS LINT COMPANY OF ZAMBIA2 , the facts and circumstances of each case have to be examined in order to glean what the parties intended. In this case there are very explicit conditions of service which provide that the effective date of termination will be stipulated in the notice. The letter of termination dated 2 n d November 1999 stated that the deceased's services would be terminated with effect from the 5 th November 1999 . It is trite that the employment relationship is anchored in contract. A contract is governed by its terms and where the terms of the contract are not .clear, t he Court will resort to ascertaining the intention of the parties. The duty of the Court is to give effect and enforce the provisions of a contract when called upon to do so thr:ough litigation. ' As We have observed above , the contract in this case was very explicit, that the contract of employment could be terminated on • payment of salary and leave in lieu of notice and such termination shall take effect on the date stipulated in the notice and not the date when the payment is made. We are cognizant of the fact that while employers may terminate their employee's contracts on a specified day and undertake to pay a sum of money in lieu of notice; it may take a while to actually pay the employee the monies due. Delayed payment cannot change the effective date of termination. Any prejudice occasioned by the delayed payment can be mitigated by an award of interest on the moneys due up to the date of payment. -· To hold otherwise, would mean that the employee remains in employment until the date of payment of the monies in lieu of notice; a situation which was not intended by the parties. In our view, the Court misunderstood our holding 1n the case of GERALD MUSONDA LUMPA 1 • In our view, the case of GERALD MUSONDA LUMPA1 cannot be. construed to mean that in every case, the effective date of termination of a contract of employment by payment in lieu of notice is the date of such payment. In our view, the Court, in that case, merely alluded to two of the methods that could be used to terminate a contract of employment: the giving of three months' notice or deciding to pay three months' salary in lieu of notice. Under the former, an employee continues to work during the continuance of the notice, while under the latter, the contract terminates and the employee is entitled to monies in lieu of notice. A delayed payment, as we have stated above, would entitle an - affected employee to interest during the period that the money remains unpaid. Any other interpretation would lead to absurdity and unjust enrichment, in that persons whose contracts ·. were .. terminated on payment in lieu of notice, would claim their salaries and other benefits for periods not worked for. To be in effective employment, one has to actually be working. We made this point clearly in the case of KITWE CITY COUNCIL VS WILLIAM NG'UNI4 when we held that: "It is unlawful to award a salary or pension benefits for a period not worked for because such an award has not been earned and might be properly termed as unjust enrichment." To this effect, we agree with the learned Counsel for the Appellant that the Respondent can only be entitled to interest on any monies due that have yet to be paid. On this premise, the second and third grounds of appeal must succeed. In the first ground of appeal, the Appellant contends that the Court could not, on one hand, find that the Respondent had not proved her case on a balance of probabilities, and on the other, award the Respondent damages in line with Section 85A(d). The learned Counsel for the Appellant argued that Section 85A (d) only allows a Court to grant a remedy where the complaint has proved his claim. It is clear to us, from the last sentence of the judgment, that the salary arrears and terminal benefits that were awarded to the Respondent were based on Section 85A (d) of the Act. We are alive to the fact that the Industrial Relations Court is a Court of substantial justice and not bound by rules of evidence in civil or criminal law. This is to enable the Court arrive at a just decision, unfettered by such rules. Section 85(5) of the Act states that:- t "The Court shall not be bound by the rules of evidence in civil or criminal proceedings, but the main object of the Court shall be to do substantial justice between the parties before it." Much as the IRC is not bound by rules of evidence in civil or criminal proceedings, it can only grant a remedy to a party who proves his or her complaint. In the case of ZCCM LIMITED VS JAMES MATALE5 , we held that:- "In the process of doing substantial justice, there is nothing in the Act to stop the Industrial and Labour Relations Court from delving behind or into reasons given for termination in order to redress any real injustices discovered ... " The Respondent, in this case claimed among others, damages for unlawful termination of contract and a declaration that the said termination was made in bad faith and therefore unfair. The Court found, properly so, that the Respondent had failed to prove her case on a balance of probabilities. · It stated " t ... we accep ' the arguments of both Counsel that the termination · of employment of the late Darius MHLANGA was properly done in conformity with the terms and conditions of employment." Having so found, it was a contradiction in terms, in our view, for the Court to have awarded the Respondent salary arrears and other benefits beyond 5 th November 1999, which was the effective date of termination of employment, because the deceased was not in employment after that date. The provisions of Section 85A (d) are ' very clear. The Court can only grant an Order in favour of a complainant if it finds that the complaint was justified and - reasonable. The lower Court found that the contract in this case, was terminated in accordance with the terms and conditions of employment. In our view, it was, consequently, a misdirection for the Court to have awarded salary and benefits beyond 5 th November 1999. We find merit in the first ground of appeal. From the foregoing, all the grounds of appeal have succeeded. We therefore, allow this appeal. The order by the lower Court that the estate of Darius MHLANGA be paid salary arrears and other benefits ' ... . from 5 th November 1999, to the date when he was effectively terminated ... ' is hereby set aside. Each party shall bear its own costs. I. C. Mambilima DEPUTY CHIEF JUSTICE I